The Effect of Geographic Dispersion On Accrual-Based Earnings Management & Real Activities Earnings Management

Document Type : Research Paper

Authors

1 MSc. Student, Nongovernmental nonprofit institution of higher education Hasht Behsht, Isfahan, Iran

2 Assistant Prof of Accounting, Azad university Folad Mobarakeh branch, Isfahan, Iran

Abstract

Earning managements means general intervention of management in the process of determining earnings, which is often in line with desired objectives of the management. In the accounting literature, the most common methods for earnings management are accrual-based earnings management and real activities earnings management. This study examines the effectiveness of a firm's geographic dispersion on choosing between the two kinds of earning management, as the real activities earnings management and the accrual-based earnings management, to be followed. This research is an empirical fundamental in terms of objective and a correlation in terms of nature. The statistical population consists of firms listed in Tehran Stock Exchange in the period from 1386 to 1394. The sample consists of 105 firms from different industries and the sampling method is systematic elimination, libraries and documentation. This study has two hypotheses which are tested using multivariate regression and T-test models. The results show that geographically dispersed firms have a lower level of accrual-based earnings management as well as real activities earnings management, as compared to the other firms. 

Keywords

Main Subjects

References

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Empirical Research in Accounting
Volume 9, Issue 3 - Serial Number 33
December 2019
Pages 327-351

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History

  • Receive Date: 20 May 2018
  • Revise Date: 31 July 2018
  • Accept Date: 01 August 2018

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